Farecast getting ready to fly with airfare analysis technology

What is it with Seattle area startups and their desires to predict the future?

Zillow.com wants to help you figure out the market value of homes, while Inrix – which announced $10 million in venture capital this week – is looking to help motorists forecast the best way around congested roads.

Now, a third Seattle Internet startup is unveiling its system for predicting the ever-fluctuating prices of airline tickets.

Farecast, founded three years ago by University of Washington computer scientist Oren Etzioni, tells travelers whether air fares are expected to rise or fall in a given period of time. It then offers tips on whether travelers should buy the ticket now or hold off for a few weeks. Links to fares from major U.S. airlines are provided below the predictions.

About 700 people who fly regularly from Seattle and Boston have been testing the site since late February, with a public rollout scheduled for next month. At that time, Farecast will allow consumers to research price volatility for flights from Seattle and Boston to about 60 major airports.

The company plans to have about 65 outbound markets represented by the end of this year. It also is working on technologies to analyze one-way and multi-city tickets. For now, Farecast doesn’t look at international routes.

A scheduled presenter at the WSA Investment Forum Thursday, Farecast showed off the technology for the first time to the media this week.

“We haven’t achieved clairvoyance and I don’t think that is a realistic goal,” said Farecast Chief Executive Hugh Crean. “But over a couple years of looking at this and studying it with the right resources and the right minds, we have improved the technology.”

The service could come in handy, with the CEO of American Airlines’ parent company saying Wednesday that passengers will have to get used to higher fares because “that’s the reality of living in a world of $70-a-barrel oil.”

A Farecast search for flights between Seattle and Cleveland for mid-June produced round trip flights from Northwest Airlines for as little as $332. That’s a pretty decent price, with Farecast showing an average low price over the past 69 days of $348 and an all time low during that period of $298. Using sophisticated algorithms, the site also warns consumers that there is an 80 percent likelihood that fares will rise by more than $50 in the next seven days. Farecast’s suggestion on the $332 ticket to Cleveland: “Buy Now.”

The company also offers trip planning tools, so a person who wants to research the best prices to beach destinations could plot several air routes to get an idea if it is cheaper to fly from Seattle to San Diego, Miami or Los Angeles during a 30-day period from June 15 to July 15. In that example, a Farecast user would see that flights into L.A. are cheapest in the early part of June, rising above $300 after the Fourth of July. Flights into Miami never drop below $350, according to the site.

While Expedia offers a calendar of prices around selected travel dates and Kayak.com aggregates prices from major carriers, Crean said that no other online travel search engine predicts when people should buy tickets.

That’s not necessarily the case. Minneapolis-based Flyspy, which like Farecast has yet to launch publicly, also is working on a system to inform airline customers about the best time to buy tickets to select destinations.

But Crean – a 34-year-old former vice president at Priceline.com – said Farecast is unique because it systematically analyzes price information from billions of flight itineraries to come up with its predictions.

“The information we are gathering and storing is not just the pricing and scheduling, it is also what was available in a moment in time,” he said. “That is a key difference relative to some others.”

Interestingly, the design of the Farecast site is quite similar to Zillow, with graphics showing historical prices and charts plotting prices between select airports. Like Zillow, Farecast plans to make most of its money through online advertising. However, Crean said there are some opportunities to split transaction revenue with airlines or other partners.

“There are some corollaries to Zillow,” said Crean. “I think Zillow has a goal of empowering customers to be more knowledgeable when buying or selling real estate; very similar, Farecast is about empowering customers to be better equipped to shop and buy airfare online.”

Zillow’s predictions have come under scrutiny, with many people questioning the values that the company places on homes.

Crean recognizes that even the most sophisticated data mining technologies can miss the mark. That’s why Farecast tells consumers how confident they are in their predictions, with some tips having less than 50 percent accuracy.

“It is very analogous to a weatherman,” said Crean, adding that the technology is constantly being improved.

Because Farecast receives air fare pricing information from ITA Software, it does not take into consideration special fares that may appear on Web sites such as Expedia or Travelocity. But Crean – who says the majority of online shoppers buy airline tickets directly from carriers – doesn’t think that is a big concern.

“The airlines have pretty much moved their best pricing to their own Web experience and they are guaranteeing that, so there is not a lot of special deals on unbundled airline tickets that are made available through the online travel agencies,” said Crean.

Farecast getting ready to fly with airfare analysis technology

What is it with Seattle area startups and their desires to predict the future?

Zillow.com wants to help you figure out the market value of homes, while Inrix – which announced $10 million in venture capital this week – is looking to help motorists forecast the best way around congested roads.

Now, a third Seattle Internet startup is unveiling its system for predicting the ever-fluctuating prices of airline tickets.

Farecast, founded three years ago by University of Washington computer scientist Oren Etzioni, tells travelers whether air fares are expected to rise or fall in a given period of time. It then offers tips on whether travelers should buy the ticket now or hold off for a few weeks. Links to fares from major U.S. airlines are provided below the predictions.

About 700 people who fly regularly from Seattle and Boston have been testing the site since late February, with a public rollout scheduled for next month. At that time, Farecast will allow consumers to research price volatility for flights from Seattle and Boston to about 60 major airports.

The company plans to have about 65 outbound markets represented by the end of this year. It also is working on technologies to analyze one-way and multi-city tickets. For now, Farecast doesn’t look at international routes.

A scheduled presenter at the WSA Investment Forum Thursday, Farecast showed off the technology for the first time to the media this week.

“We haven’t achieved clairvoyance and I don’t think that is a realistic goal,” said Farecast Chief Executive Hugh Crean. “But over a couple years of looking at this and studying it with the right resources and the right minds, we have improved the technology.”

The service could come in handy, with the CEO of American Airlines’ parent company saying Wednesday that passengers will have to get used to higher fares because “that’s the reality of living in a world of $70-a-barrel oil.”

A Farecast search for flights between Seattle and Cleveland for mid-June produced round trip flights from Northwest Airlines for as little as $332. That’s a pretty decent price, with Farecast showing an average low price over the past 69 days of $348 and an all time low during that period of $298. Using sophisticated algorithms, the site also warns consumers that there is an 80 percent likelihood that fares will rise by more than $50 in the next seven days. Farecast’s suggestion on the $332 ticket to Cleveland: “Buy Now.”

The company also offers trip planning tools, so a person who wants to research the best prices to beach destinations could plot several air routes to get an idea if it is cheaper to fly from Seattle to San Diego, Miami or Los Angeles during a 30-day period from June 15 to July 15. In that example, a Farecast user would see that flights into L.A. are cheapest in the early part of June, rising above $300 after the Fourth of July. Flights into Miami never drop below $350, according to the site.

While Expedia offers a calendar of prices around selected travel dates and Kayak.com aggregates prices from major carriers, Crean said that no other online travel search engine predicts when people should buy tickets.

That’s not necessarily the case. Minneapolis-based Flyspy, which like Farecast has yet to launch publicly, also is working on a system to inform airline customers about the best time to buy tickets to select destinations.

But Crean – a 34-year-old former vice president at Priceline.com – said Farecast is unique because it systematically analyzes price information from billions of flight itineraries to come up with its predictions.

“The information we are gathering and storing is not just the pricing and scheduling, it is also what was available in a moment in time,” he said. “That is a key difference relative to some others.”

Interestingly, the design of the Farecast site is quite similar to Zillow, with graphics showing historical prices and charts plotting prices between select airports. Like Zillow, Farecast plans to make most of its money through online advertising. However, Crean said there are some opportunities to split transaction revenue with airlines or other partners.

“There are some corollaries to Zillow,” said Crean. “I think Zillow has a goal of empowering customers to be more knowledgeable when buying or selling real estate; very similar, Farecast is about empowering customers to be better equipped to shop and buy airfare online.”

Zillow’s predictions have come under scrutiny, with many people questioning the values that the company places on homes.

Crean recognizes that even the most sophisticated data mining technologies can miss the mark. That’s why Farecast tells consumers how confident they are in their predictions, with some tips having less than 50 percent accuracy.

“It is very analogous to a weatherman,” said Crean, adding that the technology is constantly being improved.

Because Farecast receives air fare pricing information from ITA Software, it does not take into consideration special fares that may appear on Web sites such as Expedia or Travelocity. But Crean – who says the majority of online shoppers buy airline tickets directly from carriers – doesn’t think that is a big concern.

“The airlines have pretty much moved their best pricing to their own Web experience and they are guaranteeing that, so there is not a lot of special deals on unbundled airline tickets that are made available through the online travel agencies,” said Crean.